Financial Blogger

Keeping all money in the bank is a common practice, and if this is something that you do then you’re certainly not the only one. But while it may seem like a good idea thanks to statutory protections, this is not necessarily the case. Inflation can also have an effect, which ought to be taken into account. This article will explore the pros and cons.

Yes: it’s the ultimate safety net

Deposits made to banks in the UK are protected under a scheme known as the Financial Services Compensation Scheme. Deposits made with each banking company (not each bank brand, and some companies own several banks) are protected up to £85,000, meaning that if the bank goes out of business, you’ll get your cash back. Investment vehicles which can rise and fall in value are not protected, meaning that banks are often seen as especially safe.

There are more advantages to using a bank, especially when it comes to quick withdrawals. Bonds, stock portfolios and more often insist that you lose access to your money for a fixed period of time in return for higher returns, or they may take a long time to withdraw simply due to the level of administration required.

It can be hard to stop yourself from overspending at Christmas, no matter how strict you are the rest of the year. Many people admit to over spending on their credit card or taking out a high cost to help them pay for their perfect Christmas. Spending on your credit card is no crime, as long as you can pay it back.

With the average UK household spending £500 upwards on Christmas this year, keeping an eye on your costs is important to avoid being caught in a spiral of debt and taking several months to pay off your holiday season.

The key is to be realistic with what you can afford and to save if you want to spend more than you usually would in a month. Preparation is key. So, to help you avoid overspending this festive period, we have put together ways in which you can do so.

Investing is something that many people would like to get started with, but shy away from due to feelings of nerves. Often, the main off-putting factor is that there’s no guarantee of a good return – and, of course, this is true to some extent. In the world of investing, very few things are ever predictable or guaranteed. However, there are some ways to improve your chances of success. From doing your research and monitoring the market to opting for diversified, balanced portfolio types, you can increase the odds that your investments will work out in your favour.

Diversify your portfolio

The first way to preserve your returns when investing is to diversify your portfolio as much as possible. Diversification essentially means spreading your investment capital around as many different vehicles and asset classes as possible. As an example, you may decide to focus 20% of your portfolio on cryptocurrencies, 50% on equities and the remaining 30% on property. If one of the classes to which you are exposed declines in value while others rise, then you won’t lose everything – and the impact on your return will hopefully be small.